Rick Burton of University of Oregon

Rick Burton was Director of the Warsaw Sports Marketing Center at The University of Oregon. He sees the traditional sports business model being challenged. He frets that young people may be losing interest in sports for a whole bunch of reasons. Here he explains why.

Of Life and Sport
(Interview has been reformatted for our new site. Interview conducted in 2000.)

Rick Burton is passionate about American sports. And he’s worried. “What’s driving me is this passion for — not to be jingoistic — but this American way of life. I’m worried that we may be losing parts of it,” he says.

Rick is Director of the Warsaw Sports Marketing Center at The University of Oregon — but his perspective is anything but academic. He sees the traditional sports business model being challenged. He frets that young people may be losing interest in sports for a whole bunch of reasons. He thinks the big leagues haven’t done enough to stay connected with their fans, or thought enough about how to grow the business of sports on the global stage.

Go Big yellO

Says Rick: “I’m in a position where I’m helping train and educate future leaders for the industry and I’m telling them they need to think about these issues, about how technology changes participation, and how things like rising prices affect avidity.”

A couple of decades ago, Rick graduated from Syracuse University with a B.S. in Communications. Straight out of college, he was hired as a sports writer for the Syracuse Post Standard and did that for about a year and a half after he graduated. Then Miller Brewing Company hired him as a sports public relations specialist, to do PR for all the sponsorships and sports activities with which Miller was involved.

Rick moved into brand management, ultimately becoming an advertising manager for Miller Light and a brand manager for a couple of other brands. His career at Miller lasted 12 or 13 years — until Dick Strup, a senior VP — told Rick he ought to spread his wings a bit. So he went to work for Clarion Performance Properties, a sports marketing agency, then a unit of DMB&B, for about three years, for clients like the NFL and Universal Studios, Kraft, Reebok and Gillette.

“I learned more in three years at Clarion than I had learned in 13 years at Miller,” says Rick. “Being at a good sports marketing agency really required me to learn a lot more about strategy, market forces, and how to look at a business opportunity or problem.” Then Rick heard that the University of Oregon was creating a first-of-its kind sports business program. Actually, the Warsaw Center was the first program housed in a college of business, the first that really viewed the business of sports as being a distinct area — not unlike the way Cornell has a school of hotel management, Rick explains. Hey, the sports industry is more than $200 billion in the U.S. and maybe as much as $500 billion worldwide. It’s big business.

University of Oregon Cheerleading

At the University of Oregon, Rick wears a couple of different hats. He teaches inside the college of business. So, he’s involved with recruiting students and fundraising and things that ultimately keep the sports business program strong. He also does some consulting on the side, which allows him to bring some first-hand experiences back into the classroom. “It’s a phenomenal blessing to be out here, to work with young people who are excited about getting into the industry and to be involved with the problems and opportunities of sport,” says Rick.

But — like he said — he’s worried.

Rick Burton: The traditional sports business model is being challenged. We now have as many as 500 TV channels, 5 million Web sites and maybe 40, 50, or 100 sport activities that a consumer might be able to choose from. So now when we broadcast a game, the numbers — the ratings — aren’t what they used to be. Nobody did anything wrong. It’s just that there are now so many more choices.

The broader message, for the general sports business practitioner, is how good are you at looking at how technology is changing the nature of your business? Keep in mind, very few of the companies that were in the Fortune 100 one hundred years ago exist today. Why is that? Why did those companies fail? What is the life cycle of a company? What does it take to remain relevant over 100 or even 50 years?

And, is that life cycle process actually speeding up? What you take for granted in sports today may not be guaranteed for the next thirty years. There may be no guarantee — unless those leagues can adapt aggressively and efficiently to how society is being changed by technology — that those leagues will be here 20 years from now.

One of my biggest concerns is the youth market. I’m concerned about whether the leagues are aggressively inviting young people to care about their games, to care about their leagues. If they don’t, how do they expect to have broadcast ratings? How do they expect to have a significant audience 10 years from now? If my son is 13 and he doesn’t play basketball and he doesn’t follow basketball, what makes anyone think that he’ll suddenly become an NBA fan when he turns 25?

A lot of kids, instead of playing basketball, baseball or football, are playing on the computer. Or, maybe they’re inline skating or skateboarding or snowboarding. That’s where their avidity may be going. The baseball diamonds are empty, but the skate parks are full. Baseball has got to start saying — Okay, what do we need to do to get more kids on the baseball diamonds?

Rangers vs Capitals - Game 1 - April 28 2012 - Madison Square Garden

If you go to a game at Madison Square Garden to see a game with the Rangers or the Knicks, count up how many kids are in the arena. If it adds up to more than a hundred, I’d be amazed. Kids have been priced out of the stadium. Who can afford to pay fifty bucks to take a kid to a game? And that doesn’t include parking and programs and hot dogs. The average cost for a family of four to attend a game is like a mortgage payment.

If these leagues don’t aggressively address the youth market and figure out how to use technology to get to the youth market, they may wake up one morning and find that their audience has literally moved away on them.

Some of the leagues have thought about this, but some of them really haven’t done much with it. The NFL, for a while, talked about buying Pop Warner football, the local youth football league. In the same way that marketers invest in research or new product development, the NFL could take an active role in providing Pop Warner teams with mini replicas of the Colts, the Giants or the Seahawks uniforms and helmets.

So, if my son goes to play youth football, he might get assigned to the mini Vikings. He might see, then, that the number on his back is the same number as Daunte Culpepper or Randy Moss. He may then care marginally more if we get him to come out and play, because he wears a uniform that makes him look like he’s a mini Viking.

You know, we treat our stadiums as if they were sacred palaces, sacred temples. We don’t let anybody inside unless our professionals are playing in them. And yet they stand empty for many months of the year. Let the kids come in and play! I know it’s not cost efficient. It doesn’t make economic sense. But the stadiums are standing empty, and the overhead is going to exist whether it’s empty or a bunch of little kids are playing a game in it.

Now, the leagues would say that they have aggressive youth programs. Some of them would say, “Well, if Mr. Burton had called us, we would have been happy to tell him everything that we’re doing. He acts as if we’re doing nothing.” My response is, “Okay, touché. You guys are doing it. But I hope you have a real strong sense of urgency because the way this demographic bubble is going to move through the system is such that you could hit the wall really hard.”

PGE Turow Zgorzelec - Bayern Monachium

The leagues also need to continue to take more of a global view. The NFL has a beachhead in Europe with the NFL Europe. And the NBA annually plays games in Europe and it has really been aggressive in developing a presence in other parts of the world. I think it’s only a matter of time before the NBA says, “Well, why don’t we buy the National Basketball League of Australia? Why don’t we buy the Greek League or the Spanish League and have them be satellites of the NBA?”

Certainly hockey, right now, has roughly a third of its players from the United States, a third from Canada and a third from Europe. If you go into Sweden or Russia or Finland — they’ve produced great NHL players that are now playing in North America. If you had a team in Helsinki or in Copenhagen, you might make your product more globally relevant.

Hockey translates well across the Northern climes — Russia, Finland, Poland, Denmark, Sweden, Norway. Baseball translates well across warmer places — Japan, Venezuela, Cuba, Mexico. Basketball may translate well everywhere. American football may be a bit of a push because of the expensiveness of the equipment, but soccer is certainly going to be a global sport, as is rugby.

At the local level, the teams need to take a longer-term view. Most businesspeople — CEOs, CFOs, COOs — are looking as far down the road as they possibly can to make sure they can manage the business in the most efficient and profitable way. Sports owners, however, tend to take a one year or a six-month perspective. They’ll go out and spend a lot of money on a lot of free agents so that the next year they have a chance to be a winner.

So they sign an Alex Rodriguez to a $250 million contract — but then they raise ticket prices and hike the cost of a hot dog and a beer and parking to offset the cost of what they paid for the player. And even if, in year one, everything is sold out because everyone is excited to come out and see Alex Rodriguez, the prices never go back down. It may be only a matter of time before that business is really inefficiently arranged.

It’s not unlike what happened with the dot-coms. A lot of people quit good jobs to take employment with a dot-com startup. They were going to get equity and live happily ever after. A couple of them hit it really right and got really rich really fast. A lot of them right now are getting laid off because their dot-com didn’t have a revenue model that was going to allow the business to stay around for five years.

That’s a great way to think about sport. Does it have the potential to be a short-term flash, even though it’s been around for 100 years? Or, are the people in charge going to take the steps to ensure that it’s a long-term play? At the local level, there are too many owners of professional sports who are only thinking about tomorrow and not about next week.

We’re going to continue to consume professional sports. We’re going to always be amazed by the great athletes. What may happen is that certain leagues may find they no longer attract the super athletes. Certain leagues may find that their games are no longer hugely relevant in the market where they’ve always thought they had their greatest popularity.

Let’s take baseball, for example. What if we started to wake up and find that baseball had greater appeal in Japan and Venezuela in the future than it did in the U.S? What if it ceased to be relevant in the United States because the prices just got too high and the kids just weren’t playing it locally? It won’t happen, right? Well, I dunno.

I know I sound like a prophet of doom and I don’t necessarily mean to be that. I’m like some kind of John the Baptist out here in the wilds of Oregon. But these leagues have got to be looking at how to sustain their product. Someone has to ask relevant questions — connected not only to where is sport going in the future but also how businesses are reacting to changes in both society and technology.

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Rick Burton is now the David B. Falk Endowed Professor of Sport Management in Syracuse University’s David B. Falk College of Sport and Human Dynamics.

From 1995-2003 (the time of this interview), Burton led the University of Oregon’s Warsaw Sports Marketing Center to international prominence serving as both its director and executive director (1998-2003). While at Oregon, he created the Burton Marketing Group working in league management and sponsorship for entities such as IMG, Philippine Basketball Association (PBA), Japanese Pro Soccer League (J-League), National Football League (NFL), National Hockey League (NHL), Australian NBL, Visa, Oakland Raiders, FedEx, Indianapolis Colts, Buffalo Bills, Professional Bull Riders, Sport Accord, and TSE.

This interview was reprinted with permission from Reveries.com. Thanks to Reveries.com and Tim Manners.

Follow Rick Burton on Twitter.

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